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HMRC internal manual

Debt Management and Banking Manual

Interest: interest on late payments: administrative limits

Prior to 19 April 1993 a statutory de-minimis of £30 applied to interest accruing on most direct taxes. Its purpose was to prevent small amounts of interest being charged and collected. Particularly as in the years prior to 1993 interest was charged and collected after the main duty was paid in full. As computer systems developed it became possible to include accruing interest in the notification for the main duty. This enabled small amounts of interest to be collected at no extra cost and provided an incentive for earlier payment.

The £30 statutory de-minimis for interest was replaced with a £32 administrative limit. The administrative limit is applied on most direct taxes to ensure that amounts of interest of less than £32.01 are not pursued when this would be the only amount due from a customer. Amounts of interest below £32.01 can be collected with other outstanding amounts of duty or interest.